Opinion: Parent company instability undermines Caesars Japan

Caesars Entertainment built up one of the strongest ground games among the international operators campaigning for an IR license, but instability at the parent company in Las Vegas undermined the local team’s efforts, and has now caused the company to become the first major IR operator to pull out of the Japanese market.

Under the leadership of former President and Chief Executive Officer Mark Frissora, Caesars made an aggressive effort in Japan, especially during the course of 2018. Caesars was the only major Las Vegas IR operator that had missed out on previous rounds of development in places like Macau and Singapore, and it clearly intended Japan to be the place where that situation was rectified.

The character of Caesars’ campaign was distinct. Jan Jones Blackhurst, for example, led efforts to demonstrate that Caesars was completely committed to policies of minimizing social harm from gambling addiction. To this day, no other international IR operator appeared as genuinely serious about addressing this major concern of Japanese society.

Beyond its good citizen approach, Caesars also attempted not be politically outflanked by other US operators utilizing the influence of the US-Japan Alliance. They created a “Japan Advisory Committee” led by former US Senate Majority Leader Tom Daschle, former US Trade Representative Charlene Barshefsky, and Kara Bue of Armitage International.

Caesars Japan was also among the most proactive in hiring local staff, finding talented young Japanese executives who were expected to rise in rank as the years progressed.

The high-water mark of Caesars’ campaign came last September when it announced its “100 Year Partnership for Japan” campaign, emphasizing its long-term commitment to the country. Beautiful concept images for a Yokohama IR design were released at that time.

In the end, however, the “100 Year Partnership” did not last even a single year.

Only a month later, the Caesars parent company in Las Vegas fended off a buyout attempt by Golden Nugget Casino owner Tillman Fertitta. Not long after that, it was announced that Frissora would be stepping down as the firm’s leader with no clear direction for the future. By February of this year, famed investor Carl Icahn launched his campaign to effectively take control of Caesars Entertainment, adding yet another layer of instability.

The effective death blow for Caesars’ campaign in Japan appears to have been delivered by the massive June deal that saw Eldorado Resorts buy out the firm. The key point is that the expected leader of the larger, merged company, Tom Reeg, holds the view that Caesars needs to concentrate on the US home market rather than expend time and energy on foreign pursuits. As the most recent press release puts it, “The company has decided to focus on its current plans and commitments.”

So Caesars Entertainment, a firm which put together a powerful ground army in Japan, has conceded the battlefield before even the first shot was fired.